Opinion No. 15-13 Re: Amendment of By_laws adding three (3) additional Corporate Officers designated as Presidents

SEC Building, EDSA, Greenhills, Mandaluyong City Securities and Exchange Commission Republic of the Philippines Department of Finance

Office of the General Counsel

03 November 2015

SEC Opinion No.15-13 Re: Amendment of By-Laws adding three3)additional Corporate Officers designated as Presidents

ATTY.EMILY SIBULO-HAYUDINI

22nd Floor, The Taipan Place SEAOil Philippines, Inc. F.Ortigas Jr. Road, Ortigas Center Pasig City,1605 Philippines Corporate Secretary

Madame:

regarding the legality and propriety of having three (3) Presidents in SEAOil Philippines Inc. (SPI This is in response to your letter dated 30 September 2014, requesting our opinion

You stated that currently,SPI is headed by the Chief Executive Officer/President combining in one person the total responsibility of envisioning the long-term strategy and the day to day operations of the company. However, there is a plan to re-organize the company that entails the amendment of SPI's By-laws. You described the re-organization, as follows:

remain as the highest ranking officer and the public face of the company.As CEO company but most importantly, to its customers.The three (3) Presidents would all his main task shall be the formulation of long range plans and development of key initiatives. But in lieu of having only one President, the proposal is to have three business of SPI, namely, commercial sales, retail sales and lubes/motor additives. was thought that having three (3) different Presidents [to] handle the day to day operations of each business line would be of utmost advantage not only to the (3) Presidents who shall be separately responsible for the three (3) major areas of These three (3) lines of business cater to different customers of the company and it As proposed, SPI will have the Chief Executive Officer(CEO who shall

be reporting directly to the CEO

The pertinent provision of the Corporation Code provides:

directors of a corporation must formally organize by the election of a president. may be provided for in the by-laws. Any two (2) or more positions may be held who shall be a director, a treasurer who may or may not be a director, a secretary "Section 25. Corporate officers, quorum. - Immediately after their election, the who shall be a resident and citizen of the Philippines, and such other officers as

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concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time. duties enjoined on them by law and the by-laws of the corporation. xxx xxx xxx The directors or trustees and officers to be elected shall perform the

(Emphasis supplied)." XXX XXX XXX

In a previous opinion', it is provided that:

"As to the first issue, in the Corporation Code, there is no required designation of title of corporate officers, only that there shall be a president, a treasurer and a secretary.A perusal of the by-laws of Worldwide Filipino Alliance 2010,Inc.reveals that the officers of the association shall be a President,a Vice- President, a Secretary and a Treasurer. As it is planned by the corporation to add officers and adopt titles for officers different form those written in the by-laws, the change of these titles and the addition of officers must appear in the by-laws after the amendment to this effect has been duly approved by a majority vote of the members and by majority vote of the trustees, according to the manner of amendment as provided in the by-laws. (Emphasis supplied.)

Thus, the law mandates that every corporation must have a President.

others, a chief officer, a presiding or managing officer; a governor, ruler, or director. Customarily, he is given general supervision and management of the business affairs of the Generally, a president of a corporation is defined as the one placed in authority over

corporation.

The Supreme Court ruled in the case of People Aircargo and Warehousing Co. Inc. v. C.A, that:

"Inasmuch as a corporate president is often given general supervision and control over corporate operations, the strict rule that said officer has no inherent power to act for the corporation is slowly giving way to the realization that such officer has certain limited powers in the transaction of the usual and ordinary business of the corporation. In the absence of a charter or bylaw provision to

domain of the general objectives of its business and within the scope of his or the contrary, the president is presumed to have the authority to act within the

her usual duties." (Emphasis supplied.)

2 Black's Law Dictionary 3 G.R.No. 117847. October 7, 1998 SEC-OGC Opinion No. 10-11 addressed to Mr. Rogelio B. Bantiles dated 07 March 2011

SEC-OGC Opinion No.15-13 Re: Amendment of By-Laws

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President, such as but not limited to the following: Further, the Corporation Code imbues definite powers and responsibilities upon the

a To order the calling by the Secretary of a special meeting of the stockholders or members of a corporation for the purpose of removal of

b)To call for a special meeting of the board of directors or trustees at any C To preside at all meetings of the directors or trustees as well as of the directors or trustees;4 time or as provided by the by-laws;

stockholders or members, unless the by-laws otherwise provides; d) To sign the certificate of stocks representing shares issued by the

fTo sign the verification of a petition for dissolution of the corporation. e)To sign the articles of merger or articles of consolidation; and corporation:

Because of the importance of his position, the law prescribes some qualifications. disqualifications of a President, among which are that (l he must be a director of the corporation, and (2) he must not concurrently hold the positions of Secretary or Treasurer.

the corporation's business. status, but also serves as a basis for its stockholders and the other persons/entities transacting conferred by the law and the functions given by the by-laws, within the general objectives of reposed with duties and responsibilities provided by the law and jurisprudence, which can be further expanded by its by-laws. Therefore, it serves not merely as a title of prestige or with it to determine whether such person is clothed with authority to perform the duties From the foregoing, it can be inferred that the position of a corporate president is

aforementioned qualifications/disqualifications must apply. President could mislead and create confusion as to who should perform the duties the President is, for purposes of compliance with the afore-mentioned requirements of the Corporation Code. To allow three (3) more corporate officers, who would each be called as enumerated by the law to be performed by the President, and as to whom such The by-laws must be crafted in such a way that the Commission can determine who

7 Sec. 63, Supra 4 Sec. 28, Corporation Code, B.P. 68 5 Sec. 53, Supra 6 Sec. 54, Supra 8 Sec. 78, Supra 9 Sec. 119, Supra 10 Sec. 25, Supra 11 Sec. 47, Supra

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In view thereof, we opine that considering the title ofPresident of a corporation is reposed definite and prescribed qualifications and functions, SPI may not amend its by-laws to designate three (3) corporate officers as "President/s".

It shall be understood, however, that the foregoing opinion is rendered based solely on

and shall not be used in the nature of a standing rule binding upon the Commission in other the facts and circumstances disclosed and relevant solely to the particular issue raised therein

cases or upon the courts whether of similar or dissimilar circumstances. If, upon further inquiry and investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered void.12

Please be guided accordingly.

Very truly yours.

CHMMUAS.CORRE A

General Counsel

12 SEC Memorandum Circular No. 15, Series of 2003.